Cantor v. Federal Deposit Insurance

OPINION *

GREENAWAY, JR.; Circuit Judge.

I. BACKGROUND

Downey Financial Corporation (“DFC”) and its subsidiaries (including Downey Savings and Loan, F.A (hereinafter “Dow-ney Bank”) (collectively the “Affiliated Group”)) entered into a Tax Sharing Agreement (“TSA”), which provided for the filing of consolidated tax returns. For companies engaged in this practice, IRS regulations state that any refund is to be paid to the parent company (here, DFC). 26 C.F.R. § 1.1502-77(a)(B)(2)(v). The sole issue on appeal is the capacity in which DFC held the tax refunds. This determination impacts whether the…